Volkswagen is re-entering the race for electric vehicles.
The German car giant lost its title as the world's largest automaker in terms of sales last year to Japanese arch-rival Toyota.
In the electric vehicle market, the Wolfsburg, Germany-based company has been outpaced by Tesla (TSLA) and Chinese rivals like BYD.
But where others would have surrendered, Volkswagen (VWAGY) has sought out its rivals' weak point and has found it. It is a question of hitting the more than 80% of consumers who do not have the financial means to acquire an electric vehicle. The models currently offered are unaffordable, even with public subsidies such as the federal tax credit of $7,500 in effect in the United States since January.
On Mar. 1, investors and consumers were hoping that Tesla, whose battery charging network is one of the largest in the world, was going to unveil a Model 2, that is to say, a low-cost vehicle at $25,000.
On that day, the Austin, Texas-based automaker revealed no new passenger vehicles. The last time Tesla unveiled a new passenger vehicle was in November 2019 and it was the highly anticipated Cybertruck, its very first pickup truck.
Since then, there has been nothing, and the wait has been long. A Model 2 could have enabled Elon Musk's group to reach a large consumer segment in Western countries and to conquer emerging countries. Musk and Tesla would have delivered a blow to their rivals.
The ID.2all Concept
But by not unveiling an affordable vehicle, they left a void and an opportunity for the competition. Volkswagen has just rushed in to seize the opportunity.
The German juggernaut has just unveiled a low-cost electric vehicle, priced at less than 25,000 euros ($26,400). The group presented this concept car, called the ID. 2all, on Mar. 15. The version that will be available to the public, will be produced from 2025, the company said.
The ID. 2all will have a range of up to 450 km (280 miles) and features like the company's driver-assistance Travel Assist, and an infotainment system. The front-wheel drive will have some similarities to Polo’s, Golf’s and Beetle's design.
The production version will be based on the company's modular electric drive (MEB) platform, of which it will be the first electric vehicle with a front-wheel drive, Volkswagen said.
"We are transforming the company rapidly and fundamentally – with the clear objective of making Volkswagen a genuine Love Brand," said Thomas Schäfer, CEO of Volkswagen Passenger Cars. "The ID. 2all shows where we want to take the brand. We want to be close to the customer and offer top technology in combination with fantastic design."
"We are implementing the transformation at pace to bring electric mobility to the masses.”
Ten New EV by 2026
Producing an electric vehicle for the masses is one of the biggest challenges for automakers, as the cost of the raw materials needed to develop the battery remains high. Tesla's cheapest vehicle right now is the Model 3 sedan, which starts at $42,990 and comes with a battery that has a range of 272 miles.
There are other cheaper electric vehicles like the Chevrolet Bolt EV from General Motors (GM) and the Nissan (NSANY) Leaf. The Bolt EV has a base price starting at $26,500, while the Leaf has a manufacturer's suggested retail price of $28,040.
Volkswagen's electric vehicle portfolio currently includes the ID.3 sedan, the ID.4 and ID.5 SUVs and the minibus ID. Buzz. The automaker wants to launch ten new electric models by 2026, including the new ID.3, the ID. Buzz with a long wheelbase and the ID.7 this year. This will be followed by a compact electric SUV in 2026, the company said.
The company is also working on a possible electric vehicle for less than 20,000 euros, which would be a new frontier.
"This will give the car manufacturer the widest range of electric vehicles compared with its competitors, and the company is aiming to achieve an electric car share of 80% in Europe," Volkswagen said.
